BMW – Case Analysis

By- Group 5
(Dhiraj Agarwal, Akshay Sharma, Harish Vijayan, Soumitra Dubey,
Kapil Khatter, Shreyas Gupta, Hiteswara T.)

Submitted To-
Dr. K. Abdul Waheed
Problem definition:

January 1996 marked the beginning of Phase II of BMW of North America Inc.’s Z3 roadster
introduction. Phase I had cantered on the placement of the new $28,750 two-seat convertible
in the James Bond hit movie, GoldenEye, which premiered several months earlier. While not
yet critically evaluated, results of the “out-of-the-box” pre-launch campaign appeared very
positive: word-of- mouth concerning the Z3 and the James Bond cross-promotion were
favourable, and product orders far exceeded BMW’s initial expectations. The challenge now
was to design a marketing program that would sustain product excitement until dealer product
availability beginning in March. The central problem is as follows:

“Now Doolan and McDowell had to put the rest of the program in place to make sure
the new “Made in the USA” Z3 was successful, in its own right and for the BMW
franchise as a whole.”
BMW was particularly interested on tapping into a savvy new market to drive sales of the Z3.
The team creatively used an array of marketing activities that were non-traditional to win the
hearts of the American youth. Through this, they felt that the brand would be able to pump in
fresh excitement and enthusiasm; they wanted to reposition BMW from “Made in Germany”
to “Made by BMW”.

Formulating alternatives:

1. Marketing mix with traditional v/s non-traditional marketing methods: - Here the final
launch plan budget was split 40/60 between what might be labelled “traditional” and
“non-traditional” elements.
2. Marketing mix with purely traditional marketing methods: - Here by continuing
traditional advertising method such television and print media, as it provides greater
reach to customers.

ANALYSING ALTERNATIVES

1. Marketing mix with traditional v/s non-traditional marketing methods: - By continuing

with 40/60 split between traditional and non-traditional marketing material was a
considered a success. There was a larger reach of customers through different medium
and sources. The MGM/BMW co-launch was declared a success, BMW Z3 product
reviews were favourable. Over 9,000 Z3 product orders were pre-booked by December
1995, as compared with 5,000 projected.
 2. Marketing mix with purely traditional marketing methods: By sticking with traditional
advertising was more focus on specific buyer groups with longer circulation and reach
of advertising. This alternative was more expensive than other alternatives and very
less differentiation from competitors. Television and print advertising as well as dealer
advertising and Promotions. This is more expensive than going with non-traditional
marketing mix.

Recommendation:

We recommend that BMW should go for alternative 2 as the solution. The hype has already
been created by non-traditional marketing strategies that has been implemented, as pairing up
with MGM and James bond movie Golden eye has really generated the kind of buzz that was
necessary for a new product, BMW can reach to a larger number of customers which in turn
can increase the sales in number and also improve the brands profit figures. By concentrating
on traditional marketing strategies and positioning BMW Z3 in such a way that instead of
focusing on “German engineering” focus has to be on “Made by BMW”.

Plan of action:

To implement the alternative 2, we first need to identify the brand product placement for BMW
in the targeted market. After that, as we are going to use traditional marketing practices we
need to identify the potential mediums and channels. By placing the base price of 28750$, will
be highly appealing to the American market, hence by choosing the proper media of
communication target sales could easily be achieved by choosing and setting the correct target
audience.

Contingency plan:

For the contingency plan we would like to suggest alternative 1 as if the plan of using both
traditional marketing and non-traditional marketing practices. Due to the split between the two
marketing strategies BMW can reduce their cost of production and also this alternative can
improve the BMW’s brand positioning with respect to its existing customers. This alternative
will position BMW as a global brand. This is less expensive compared to traditional marketing
practices. Since this approach has been highly successful in phase 1 of Z3 launch BMW should
stick with non-traditional marketing practises as a fall back option. By pairing up with movies
would definitely help BMW revive its image as a truly American vehicle.